UPS Halts $150,000 Driver Separation Program in 13 States After Union Pushback
UPS has halted its voluntary Driver Choice Program in 13 central U.S. states after 37 Teamsters locals filed grievances over alleged contract violations. The program, offering $150,000 separation payments to full-time drivers, remains in other states as UPS pursues up to 30,000 headcount reductions in 2026.
1. Withdrawal of DCP in 13 States
UPS has halted its Driver Choice Program in 13 central U.S. states after 37 Teamsters local unions filed grievances alleging violations of its 2023 national master contract and a regional supplemental agreement. The affected states are Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
2. Union Grievances and Legal Actions
Teamsters locals claimed the program breached six contract articles and sought a court injunction to block it; a federal judge ruled the dispute must proceed to arbitration. UPS maintains the program complies with its agreements and was well received by drivers elsewhere.
3. Implications for Headcount Reduction Goals
The buyout offers full-time U.S. drivers a $150,000 separation payment plus earned pension and healthcare benefits, targeting up to 30,000 headcount reductions in 2026. Delays in the central region may slow planned cost savings as UPS expects a 50% reduction in Amazon package volume by July.
4. Program Status and Ongoing Discussions
UPS continues discussions with central region locals on driver participation and keeps the program active in all other states. The rollout pause in select states follows an earlier suspension in February after the initial union lawsuit.